Ripple effects

Support services see boost with Cook Inlet oil, gas exploration

Seth Nelson cleans pipe thread protectors at Astech, an oil field service and support company located near the airport in Kenai, on Thursday afternoon. The company has benefitted from this year’s gas field exploration and development projects.

Related Attachments

The Cook Inlet saw an upswing in oil and gas exploration in 2011, with three independent oil and gas companies drilling new wells and another independent submitting more than 90 bids in the near-record Cook Inlet lease sale in June.

The increased activity has had a direct impact on companies that support the oil and gas explorers. Those businesses do everything from drill wells to dispose of waste.

Al Hull, from Petroleum Equipment & Services, Inc., said his outfit has felt the increased demand.

“This is the busiest I’ve seen it in a long time,” Hull said.

Randy Harris, from Rain for Rent, agreed.

“We are really excited with all the new companies working in the area, there should be plenty of opportunity for support services,” he said.

Petroleum Equipment & Services and Rain for Rent serve different oil and gas development needs, but both said the upswing is helping them out.

Rain for Rent provides water-related services to the industry, including portable storage tank rentals, pumps, filtration and other goods.

“Any time there is exploration the need for support services are in demand,” Harris said. “Buccaneer (Energy) is a good example.”

Petroleum Equipment and Services offers a variety of services, with three related companies filling different niches.

Petro serves the oil industry from the ground down, while subsidiary MRO Sales serves from the ground up, providing boots, drill rigs and anything else an oil company might need. The recycling arm, Astech, serves as the company’s Kenai Peninsula headquarters, housing all three businesses. To date the company has kept about 10 million pounds of metal and plastics out of the landfill, Hull said.

Filling the increased demand at each business requires local employees, Harris said.

“Our inventory has grown each year since 2002 when Rain for Rent came to Alaska,” Harris said. “We have went from two employees to five and will probably add more next year as business picks up.”

Hull said the upswing has kept his company going despite the economy. In the summer, when more drilling activity is underway, Hull said his company adds extra college students.

“We’ve been able to keep local people employed,” Hull said. “We’re 100 percent Alaska-owned and employed.”

In addition to the trickle-down work for companies that service the growing contingent of independent oil and gas producers, there’s been a sort of trickle-up effect.

Major oil and gas company ConocoPhillips announced recently that its Liquefied Natural Gas plant in Nikiski will be exporting LNG this spring. That comes after the company announced last spring that the plant would be mothballed at the end of 2011. The new plan is, in part, because of a contract with Buccaneer for the independent to supply the major with natural gas.

ConocoPhillips spokesperson Natalie Lowman said the company had other contracts in the works, but would not say who the suppliers were.

The increase in activity has had other unlikely effects. At a recent city of Kenai worksession, city manager Rick Koch said Buccaneer is looking to put down roots in the new Kenai Industrial Park, which is still being developed. Other oil service companies have also expressed interest in the project, Koch said.

Continued growth is dependent on a positive climate for oil and gas development, Hull said. He hopes decision-makers in Juneau can help keep the industry going.

“I think that our local alliance people are working hard to push us in the right direction,” Hull said.